Shyam Sunder Jalan vs United Bank of India

Sudip Ahluwalia, J. - G.A. 3298 of 2014 is an application praying for final judgment and decree for vacant, Khas and Physical possession of the demised premises, by evicting the defendant/respondent therefrom.

The background of the matter is that the suit was filed for eviction of the defendant/Bank, who according to the plaintiff had been a lessee in respect of an area of 1485 Sq. Feet on the Ground Floor of Premises no. 68/1A, Nimtala Ghat Street, Kolkata - 6. The lease was for commercial purpose. The lease agreements were executed /revived between the parties from time to time. The last such agreement was made on the 7th of July, 2005. Prior to determination of the lease by the plaintiff, the defendant used to pay a monthly rent of Rs. 12,919.50 calculated @ Rs. 8.70 per sq. ft besides proportionate Municipal Taxes and Commercial Surcharge. The lease was determined by the plaintiff by way of his Advocate''s Notice dated 05.09.2013 which was served upon the respondent.

After the defendant failed to quit the premises in terms of the Notice, the plaintiff filed the suit for its eviction, mesne profits and other ancillary relief(s). The defendant failed to filed its Written Statement within the stipulated time after which the plaintiff filed the G.A No. 3298 of 2014. It has however been opposed on behalf of the defendant-Bank whose contention is that the plaintiff is not entitled to recover possession of the demised premises since the defendant''s rights are covered by the provisions of the West Bengal Premises Tenancy Act 1997, and not by the Transfer of Property Act, 1882.

On the other hand, the plaintiff''s contention is that the provisions of the WBPT Act are not attracted since the rent exceeds the monetary limit provided under the Act. To counter this contention, it has been submitted on behalf of the defendant that there is no existence of any registered lease deed between the parties on account of which it cannot be said that the rent exceeds the monetary limit prescribed under the WBPT Act.

In support of this contention, the defendant has cited the decision of a Division Bench of this Court In "Coal India Ltd. v. Apeejay Private Ltd." which had observed:-

"Mr. Pradosh Kumar Mallick, Senior Counsel appearing for the appellant submits that although his occupation is not tenancy, yet, his possession is protected against interference by the respondent-landlord by section 53A of the Transfer of Property Act. He concedes that the alleged lease of 1992 by virtue of non-registration is invalid. The appellant was in possession before the execution of the alleged lease and his possession has been continued under the said alleged lease. Parties have acted accordingly to the lease. The appellant has been paying rent punctually and observing all other terms stipulated in the alleged lease deed.

a) Therefore, he submits such possession can be defended under section 53A of the Transfer of Property Act. The said section of the said Act applies only to a lease in present i.e. an agreement of lease but also to an agreement of lease but relies on the case of Maneklal v. Hormusji Jamshedji Ginwalla & Sons, AIR 1950 SC 1 and Manjural Haque v. Mewajan Bibi & Ors. AIR 1956 Calcutta 350. He further relies on the judgment reported in Technicians Studio Private Limited v. Lila Ghosh AIR 1977 SC 2425 to substantiate the contention that the equitable principle of part performance of a contract to transfer, in this case, the part performance of an invalid lease, by virtue of which the lessee has come into possession of the land, applied and that the appellant can resist eviction by the landlord contrary to terms of the invalid lease, under section 53A of the Transfer of property Act. He has also relied extensively on paragraph 4 of the affidavit-in-opposition wherein the appellant has narrated the above defence and part performance by them and readiness and willingness on their part to adhere to the terms of the alleged lease. Therefore, he contends that there is, a substantial triable issue and that he given leave to defend. He has also drawn our attention to the principles governing grant of summary judgment which were precisely enunciated in the case of Kiranmoyee Dassi v. J. Chatterjee 1945(49) CWN 246 and approved and followed in Mechalec Engineers A. Manufacturers v. Basic Equipment Corporation, AIR 1977 SC 577.

b) We are very familiar with the principles that govern grant of summary judgment. It is only in very rare cases, where the defendant has not and up to the trial has to real possibility of putting up a defence, or the defence is illusory or sham or practically moonshine that the plaintiff is entitled to judgment forthwith. Even when the defendant''s condition is practically defenseless, the Court retains its discretion to allow the defendant to defend upon securing the plaintiffs claim. Thus, even if the defendant has some case, he is permitted to stand trial and his defence is not to be shut out.

c) It is plain from a consideration of the above authorities that when a lease does not conform to the requirements of law it is invalid. It is equally true that when a person is delivered possession under the invalid lease, he is not to be considered as a lessee at all because there is no valid lease in his favour. However, if both the alleged grantor of the lease and the person in possession by virtue of the invalid grant have acted according to the terms and conditions of that invalid lease, the rule of estoppel operates. The grantor cannot deny the terms of the invalid lease and the person in possession set up the invalid lease as a shield to defend his possession. The legal rights of the parties differ, according to the above authorities, according to date of entering into possession.

The rights of the parties also differ if the result of an invalid grant makes the alleged lessee, a protected tenant under the rent Act.

d) These are no doubt quite difficult or substantial issues of law. It is not proper at this stage on the basis of the above authorities to pronounce summary judgment in favour of the respondent, as held in the case of Raj Duggal v. Ramesh Kumar (supra)."

On the other hand the plaintiff has cited a decision of the Supreme Court reported in "Payal Vision Ltd. v. Radhika Chowdhury" [(2012) 11 SCC 405], wherein it was observed -

"7. In a suit for recovery of possession from a tenant whose tenancy is not protected under the provisions of the Rent Control Act, all that is required to be established by the plaintiff landlord is the existence of the jural relationship of landlord and tenant between the parties and the termination of the tenancy either by lapse of time or by notice served by the landlord under Section 106 of the Transfer of Property Act. So long as these two aspects are not in dispute the court can pass a decree in terms of Order 12, Rule 6 CPC.

When placed in juxtaposition the averments made in the plaint and the written statement clearly spell out an admission by the defendant that the lease agreement dated 10-10-2001 was indeed executed between the parties. It is also evident that the monthly rent was settled at Rs. 50,000 which fact too is clearly admitted by the defendant although according to the defendant, the said amount represented rent for commercial use of the premises and not residential purposes as alleged by the plaintiff. Suffice it to say that the averments made in the written statement clearly accept the existence of the jural relationship of landlord and tenant between the parties no matter the lease agreement was not duly registered. Whether the tenancy was for residential or commercial use of the property is wholly immaterial for the grant of a decree for possession. Even if the premises were let out for commercial and not residential use, the fact remained that the respondent-defendant entered upon and is occupying the property as a tenant under the plaintiff. The nature of this use may be relevant for determination of mesne profits but not for passing of a decree for possession against the defendant.

The defendant tenant did not did not have the benefit of a secure term under a registered lease deed. The result was that the tenancy was only a month to month tenancy that could be terminated upon service of a notice in terms of Section 106 of the Transfer of Property Act. The plaintiff''s case in Para 6 of the plaint was that a notice was served upon the tenant under Section 106 of the Transfer of Property Act pointing out that the defendant tenant had made substantial structural changes in the premises and had not complied with the terms of the lease agreement. The notice was duly served upon the tenant to which the tenant has not replied. Para 6 reads as under:

"That since the defendant had carried out substantial structural changes and further did not comply with the covenants of the lease agreement the plaintiff was compelled to serve a notice under Section 106 of the Transfer of Property Act. The said notice was duly served upon the defendant and no reply to the said notice has been received by the plaintiff or its counsel."

Section 107 of the Transfer of Property Act, provides-

"107. Leases how made. - A lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument.

[All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.

[Where a lease of immovable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee:]

Provided that the State Government may from time to time, by notification in the Official Gazette, direct that leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession."

The assertion of the plaintiff is that the current rent being to the tune of Rs. 12,919.50 paisa exceeds the monetary limit of Rs. 10,000/- as prescribed for application of WBPT Act. The defendant has not denied that it is actually paying this rent in pursuance of the Tenancy Agreement entered into between the parties on the 7th of July, 2005 which is Annexure ''A'' to the Written Notes of Arguments filed by the defendant. It is stipulated between the parties that the rent payable in the period between the 01.01.2005 to 31.12.2009 would be @ of Rs. 7.25 per square feet, while the rent thereafter from 01.01.2010 to 31.12.2014 would be @ Rs. 8.70 per square feet. Since the floor area of the premises is admittedly 1485 square feet, so the rent for the period up to 31.12.2009 in terms of the agreement would come to Rs. 10,766.25 paisa, and the same for the period with effect from 01.01.2010 comes to Rs. 12,190.50 paisa. Admittedly the defendant had all along paid the rent at these rates to the plaintiff for the relevant periods. For both the terms covered in the agreement i.e., 01.01.2005 to 31.12.2009 and 01.01.2010 to 31.12.2014, the rent was always in excess of Rs. 10,000/- per month. In the given circumstances the principle of estoppel the in terms of para- 24 of the decision in "Coal India Ltd. v. Apeejay Private Ltd." (supra) cited from the defendant''s side would certainly apply to both parties, since they acted upon the agreement for years and years together and the defendant all along paid the rent in excess of Rs. 10,000/- per month exactly in accordance with the lease deed. That itself would cut at the root of its defendants of being covered by provisions of WBPT Act. The fact that the disputed tenancy agreement between the parties is unregistered does not automatically render the terms thereof to be void when both sides have admittedly accepted and followed the same for a long period of time. The existence of a Jural relationship between the parties is not at all in dispute in the case. So, the same would clearly be covered by the decision in "Payal Vision" (supra) to that extent therefore it cannot be said that a Triable Issue has been raised by the defendant on the question whether the tenancy lease in question is governed by provisions of the WBPT Act, in preference the Transfer of Property Act.

It is however also seen from the Agreement of Tenancy that while the same provides for an option to the Bank/Lessee to determine the lease at any time by giving three months notice, no corresponding option of terminating the same before the lease date mentioned therein i.e., 31.12.2014 has been provided. Since this Court had already observed earlier that the principle of estoppel would apply to both sides who have followed the terms of the deed, so, the Plaintiff/Lessor would not appear to be justified in terminating the same before expiry of lease date mentioned therein. The suit therefore filed by the plaintiff would in the given circumstances appear to be premature when filed, although the plaintiff does have the option to rectify the defect otherwise in accordance with law. But for the limited purpose of seeking a final judgment for vacant possession of the demised premises, the plaintiff would not appear to be entitled to the relief on the basis of the existing plaint.

For the aforesaid reasons the Application is dismissed.